Canadian black mass recycling project tweaks funding model
Electra Battery Materials will tap markets, rather than strategic investor, for capital for key mineral recycling
Canadian battery materials supplier Electra will raise the upwards of C$20mn ($15mn) it needs to scale it its lithium-ion battery recycling pilot, as well as advancing its planned cobalt refinery, from the markets and existing holders of its convertible paper.
Investment from First Nations clean energy and infrastructure fund Three Fires, which was to have put up half of the cash as a strategic investor, will no longer be part of the raise, although future partnership discussions will continue.
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Electra’s black mass recycling project is “designed to recover high value elements found in recycled lithium-ion batteries, including lithium, nickel, cobalt, manganese, graphite, and copper” at the firm’s refinery complex north of Toronto.
The partnership agreement agreed with Three Fires in late June, which would have seen the indigenous investor stump up C$10mn of Electra’s c$20mn needs, also foresaw the building of a primary EV battery recycling facility located in southern Ontario that would shred lithium-ion batteries, process battery scrap, and provide a steady supply of black mass to be refined by Electra at its new facility.
Electra’s refinery complex promises be the first in North America to integrate the production of critical minerals, including cobalt sulphate and nickel sulphate, needed for the electric vehicle battery supply chain and the processing of black mass material. Black mass is the industry term used to describe a type of e-waste comprising crushed and shredded end-of-life battery cells. It contains mixtures of valuable metals including lithium, manganese, cobalt and nickel.
Electra uses a proprietary metallurgic process to recover elements from black mass at its Ontario facility. The project began as a trial in 2022 and the company made a first customer shipment of nickel-cobalt mixed hydroxide precipitate product produced from recycled battery material in July, while stressing that its production was still part of the trial process. Developments in the field of mineral recycling could play a central role in hopes for a future self-sufficient North American battery supply chain.
Change of tack
Electra has now increased the value of its marketed offering from $10mn to $15mn, which the company says is “due to significant investor demand”, with an agent’s option of another up to C$1.5mn. The additional C$5mn will be raised on a non-brokered basis from holders of the company’s senior secured convertible notes.
Electra and Three Fires continue to work towards a joint black mass recycling strategy, including Three Fires board representation at Electra, the proposed primary recycling facility joint venture, and a future strategic investment.